The Influence of Human Behavior on Financial Planning with Jess Liberi and Michael Liersch

Jack Sharry: Hello, and thanks for joining us on WealthTech on Deck. Each week we speak with well tech leaders who create strategies, capabilities, and innovative products and platforms around the confluence of digital and human advice all to improve investor advisor and firm financial outcomes. Today, we have a first we will speak with a leading capability provider and a leading platform builder, who are working in partnership. I’m very pleased to have Jess Liberi who heads product at eMoney and Michael Liersch, who leads advice and planning at Wells Fargo on our show today. Jess and Michael, I’m so glad that both of you are on WealthTech on Deck.

Jess Liberi: Thank you for having us.

Michael Liersch: Great to be here.

Jack Sharry: Great. Terrific. So Jess, when you kick off and describe some of the high level briefly what’s your role at eMoney. What do you do?

Jess Liberi: Absolutely. So my role at eMoney is head of product. So I lead our product management team, user experience, research and design and product innovation, all really helping to drive forward our product vision and strategy and helping advisors and financial intermediaries provide more plans for more people.

Jack Sharry: Cool, cool, Michael, I know your gig. But I’d like to hear your latest rendition of how you describe it.

Michael Liersch: So I’m the head of advice and planning and wealth and Investment Management at Wells Fargo. And really all that means Jack is you know, similar just to the purpose you have is to help human beings make incrementally better money decisions. That’s our motto. And that’s what I’m all about Jack.

Jack Sharry: I like it. It’s even gotten shorter. That’s great. By the way for our listening audience. Michael was on early on in our podcast career, we’re somewhere approaching 40 podcasts at this point, Michael is number three, we’re hoping this podcast might exceed that lesson.

Jess Liberi: Competing against yourself.

Jack Sharry: So Michael describe if you would I’m quite familiar with the comprehensive advice delivery system that you are building at Wells, it’s more than just planning are more than just stuffed all the different elements of doing a comprehensive plan. So tell us about what you’re doing. And also why eMoney made some big news, big news for eMoney, big news for the industry. Why did you go with the money? And what are you building?

Michael Liersch: Absolutely. So why don’t I start with the context of what we’re building toward and then how eMoney fits into that picture, which Jess is fully aware of. But I’m sure she can extrapolate from there. So what we’re doing is building an experience Jack, which you and I have discussed in other contexts, in the experience is always intended to start with how we understand our clients, our customers, and just human beings in general, whether they work with Wells Fargo or not Jack, that’s his critical starting point. And a lot of people talk about goals and preferences and needs concerns is to think of it as all of the above, we want to know about our clients, our customers, the human beings we serve, then what we want to do is push that understanding into capabilities that can help clients and customers Plan and Plan both incrementally digitally, right. So very client led experiences, all the way to client advisor collaborative experiences, you know, where the client does some things, and the customer does some things. And then the advisor does some things, you know, think of it a remote advisor or a dedicated advisor, all of way to advisor lead capabilities, where the advisor is really driving that planning process, which typically then is more robust and or intense, however you want to think about a check. So understanding push that into planning experiences, then we want to propose things to our clients where we make suggestions based off of that, you know, understanding and planning experience, ultimately, then we want to implement, and we want to really highlight what we are implementing and what we’ve decided not to implement. And that could be the clients choice. It could be the advisors recommendation, you know, do this don’t do that. And so we want to track what we’ve implemented, what and why and why not. And then ultimately, we want to push that into think of it a revisiting process, Jack, where we come back to that narrative, and not just annually, but incrementally all along the way. And some people refer to those ideas as next best actions, however you want to think of it, where you come to that kind of the moments that matter, either most of them or in the moments that don’t seem like they matter. But then the client says, oh, yeah, I probably should be putting that incremental penalty in place. And so that’s what we’re really building toward and where E money fits in. And then I’ll hand it back to you jack is really in especially in that connection between understanding and planning. I think Imani has just done such an extraordinary job in that journey, whether it be through you know, their application, which I’m sure Jess will talk about. And I think most importantly for our business through their goals based foundational planning experience and also their advanced planning experience. And when we talk about goals-based planning, I just want to highlight you might have created something that to me is industry leading here where you can actually align accounts. So for clients goal by goal, so a retirement account, you can align that with their IRAs, 401, KS, you know, whatever it might be. And look at the funding status Jack, not just probability of success, but whether they’re funded or not for that in today’s terms, and you can do that go by global retirement, think of it as legacy goals all the way to big purchases. And that just gives a more deep experience for the client to truly understand not just at a macro level, but a goal by goal level, whether they can attain those objectives and those jobs they want to get done for with their money. So kudos to Imani for really getting that journey, right. And then in one button click, you can transition all that data information to more advanced planning concepts, especially when it gets to ideas beyond the client’s life and more complicated Cash Flow Planning. So again, kudos to you money for making that user friendly, simple. And then just the visuals of it all are exciting. And one of them just that I will compliment you on is I love it. Every time you look at the probability of success, it has this, wait for it, wait for it, clients just absolutely love that. So it has that swivel screen feeling to it, which is extremely modern, it makes that planning experience exciting and delightful. So Jack, that’s my articulation of what we’re trying to do and why you money.

Jack Sharry: Cool. So just that’s a hard act to follow. You’ve been lauded upside down and backward. Talk a little bit if you would about: Yeah, so thank you, Michael, for all of those accolades, you’re right hard act to follow. But I will say the big difference in how we’re working with Wells Fargo, it’s not so much the tools that we’ve made available. Those are the tools that we make available to the adviser industry at large, I would say, what has been really unique from the beginning is how closely aligned, our two organizations are on our views of the value of planning, and the criticality of access to planning to more and more people. So what Wells has done is decided to work with us and have access to that full suite of financial planning products. So whether it’s advanced planning, foundational planning, which Michael talked about, both of those are goals based foundational planning, as well as incentive or financial wellness app, we’ve really said, you know, what, different people at different stages, in their planning experience want different engagement models? So how can we use all of these tools alongside each other, to make sure that we’re meeting clients where they are. And I think that that view, we’ve long talked about it as our full spectrum of planning. But Wells came to the table with that view and saying, you know, how can we leverage these things to make planning more accessible to engage more people in a collaborative planning relationship, and to work together to make sure that we’re constantly taking new learnings into consideration to make these tools more and more robust, and to make sure that we’re always focused on how we make it immersive, I do think that that’s been a flagship characteristic that we focus on when we’re building planning experiences, it’s not going to be you know, the 80, page, PDF or binder presented to people any longer, it really has to be that side by side, like, let’s sit on the same side of the table and create that plan together. So that we can both feel ownership and make contributions to the creation of this plan. So again, I think just summarizing it real quickly, not so much different tools. But really, I think what’s unique is philosophically, there’s so much alignment in terms of where we want to take planning and how we see value in expanding, it’s more people in a job before you ask your next question.

Michael Liersch: I have to double click on what Jess said, because you know, those moments where you’re kind of showing, you know, a firm your strategy. And then they say, wait, and then they tell you there’s and literally, and I know we’re talking about like the stars align slides, where I really, to your point, Jess, on philosophy and vision, it was so aligned in just about every way. And I think you’re right, that full spectrum advice for all human beings. And you said it earlier, you know, more plans for more people, but not planning in that traditional way, necessarily, for all people was so resonant to me and to Wells Fargo at large. So sorry, Jack, I had to hop in there and say, no,

Jack Sharry: No, no, no. So what I’m hearing and I study you guys, and I pay attention to what you’re all up to what I pull from what you just said and also from past observation. And you said earlier, Michael, it’s incremental jest. You sit side by side, really, you’re talking about a conversation and it’s kind of step by step inch by inch, if you will. Unlike the plans way back when decades ago, there was a big book binder heavy hard to lift off the shelf, so therefore it never did get lifted off the shelf. But now it’s more conversational. It’s more back and forth. It’s more in the moment, not to day trade, but rather to plan because things change on the fly. And not that you’re gonna have a planning discussion every day but when you have that discussion It’s around that next best action. What’s the next best thing to do have that long view? And you’ve talked about this in the past? Michael, you’ve had that long view, as well as the sort of we do today. View. So maybe if you’d both comment on that, Michael, any kick it off?

Michael Liersch: That’d be make sure I’m understanding your question fully, which is, from the clients perspective, or from the firm’s perspective, let me ask you are you talking about

Jack Sharry: I’m talking about it’s a client engagement, that’s step by step, inch by inch, dealing with a real life problems now, not some 60-40. You know, you get there eventually, eventually. But point of that being, what’s the next best thing to do, given the circumstances, and it’s about listening is really what it comes down to. So that’s what I’m talking about. It’s at every level, its client, advisor firm.

Michael Liersch: So it’s interesting, our thoughts have evolved there a lot, Jack, in terms of how you articulate that to the marketplace, because that is a tough narrative. Because human beings and just you know, this about me and Jack, I know, we talked about this all the time, which is, I’m a behavioral scientist. So you know, behavioral finance and behavioral science reveals, looking at the future is just hard for human beings. To convey what you’re describing that we want to be there, all along the way, with our clients create this client for life mentality to the planning is always incremental, to your point is being in breathing experience, how we’ve started translating that is truly in moments. And so we started talking about the moments that we want to be there for our clients. And oftentimes, you know, when you think about planning and goals, I think we really need to think about changing our, maybe some of our language, their goals implies, it’s like compounding where it’s just always goes up, right? And then you don’t, you know, talk about volatility in that narrative, and we want to start talking about is, you know, the moments that are wonderful experiences for our clients, you know, they’ve attained something, they’ve wanted to accomplish that all the way to the moments where it hasn’t been so great, you know, through COVID. And through just other experiences we’ve had as a globe, I think people are more open to having that dialogue. You know, we want to be there all along the way, in the moments in our clients lives and create a culture of belonging, Jack, that’s what we’re talking about. And so no matter what happens, you can give us a call, we might not know the right answer, but we wanted to your point, listen, and understand that we can all figure out the right answers together for you, based on where you’re at, in your experience. So Jack, I know that’s a really philosophical narrative. But ironically enough, it’s pretty easy to translate into, you know, financial services, product solutions, you know, ways of approaching clients digitally, just like you’ve described, Jack, I mean, they’re very common moments people have buying their first home buying their second one, you know, getting a job losing one, you know, investing for the very first time. So these are all moments that we all know and are very prototypical that we can come to clients with. So I hope that makes sense, Jack?

Jess Liberi: Yeah, totally. Yeah. And, Michael, I’ll, I’ll add to that, because I think the behavioral aspects of it, and you’re certainly more of an expert in that area than myself. But the behavioral aspects of how you take something like planning that I think for so long has felt like an elaborate process, right? Like it starts here. And then you go through your steps. And you end with this, like I said, the 80-page binder. And it’s not about necessarily the process, it’s about the experiences, the increments that happen throughout it. So it’s not just about taking that 80 Page binder and not making a huge deliverable, resulting at the end. It’s really how do you streamline the process as a whole so that it doesn’t feel like I’ve got to go through all of this before I even get any output? It’s that conversation up front that helps the client to articulate what are the things that they want to accomplish? Which, in reality, you know, any person just having to sit back and say, you know, what are you trying to do? It’s such a hard question, to answer. It feels daunting, even in that moment to try to articulate like, all of the things that you’re trying to accomplish in your life, and just one moment so that you can get it on paper to get the resulting plan. And I think that that’s what I mean, when I start to talk about making planning a living and breathing experience. It’s about those conversations happening over time. It’s about how you help an advisor. And I think we continuously hear about this, start to feel more like that coach that’s with them arm and arm, every step of the way, through that planning experience, but it’s not such a, you know, step by step by step by step. It’s how can we make this feel like it’s happening all the time? We’re having discussions about our goals, our priorities, how they’re changing all the time, based on real things that are happening in our lives based on how things are shifting real time and then looking at what are some of the decisions we need to be making and we need to be talking about very openly, and I think it’s a change in the dynamic of a relationship between the advisor and the client. It’s a change in how the advisor is positioning him or herself in terms of that relationship to the client again more as that coach. I’ve heard many people talk about, you know, the fact that when a death happens in their family, the advisor was sometimes the first person they call not because of the financial implications of the death. But because they’ve really started to recognize their advisor as that, as a coach as that life coach, really just helping them think about these events that happen, and really just serving as a sounding board. So I think that that’s the shift. And the shifting clients not looking at planning is such a daunting exercise, that’s going to require a lot of upfront work to provide a ton of information, and then something that’s going to take a lot of work, to just upkeep, you know, how can we make it less daunting?

Jack Sharry: That’s great. That’s great. So I have 100 thoughts here, but I’ll try to keep it focused on Jess if you would continue and point out so I get a completely recently attended a good friends, good friend of mine passed away. And one of the people that spoke at his service was his advisor, an LPL advisor, and they just talked about their friendship. And they talked about the guidance that the advisor provided. So that quite clearly is what you all are talking about. So Jess if you would talk a little bit as at play out on the screen. In other words, how does that play out on the tool? And then Michael, how does that play out in the larger tool that you’re building? So Jess maybe just to start with, because let’s face it, planning is central to what we all do if it’s done properly, at least in my view. And so when you talk about that, how is the experience different? What are you doing? What have you done? Not in minute detail, but just broadly, what is it that you’re trying to achieve in terms of that user experience?

Jess Liberi: Yeah. So first and foremost, so sorry about your loss. But I think it’s so interesting and refreshing to hear about the advisors role, even in that funeral in that situation. As we look to arm advisors and clients, I would say with tools that really help them get a sense of control, right, we talk about our vision, of financial peace of mind for all and we’ll come back to the for all, I think we talked about it a little bit. But we do want to make planning more accessible. But this idea of financial peace of mind, I think is not a small one, and it’s one that is worth talking about because so often these things that you know whether a death in the family, a birth in the family, the loss of a job, absolutely have financial implications, that’s not any of our first reactions to it. It’s the emotional reaction that we have to those situations. And how much does it make an impact to know that financially, things are going to be okay. So that you can really think about the emotional side of those experiences and either enjoying them or mourning them, whatever the situation may be. And so for advisors and clients, to the extent that we can kind of help them answer that question, am I going to be okay, I think that that is the biggest role that we as the technology player behind the scenes, can play in those situations, am I going to be okay, for me as the advisor? Can I help my clients in this moment of need? Understand? Am I going to be okay, what are some of the things I need to consider? And for me as a client being able to come in and see in a more real time scenario, what are some of the things I need to consider? Can I answer that question myself? Am I going to be okay? I think that that’s really the most important role that we play.

Jack Sharry: Great. And Michael, we are running short on time. So if you would my questions, a big one. So here goes, eMoney is part of a much larger ecosystem that you’re building, explain if you would broadly high level, not only where eMoney fits, but how the rest of it comes together? Because it’s one thing to provide advice, but if they don’t do anything about it, advice is just words. So how are you pulling it all together? To ensure that an investor client gets better outcome?

Jess Liberi: I think the first thing that we all need to acknowledge is that to understand whether the human being the judge was talking about is going to be okay. You need to understand them their identity, their experiences their past, because that’s idiosyncratic to each human being. That’s not a common answer in the question means something different to everybody. And so I think that’s really critical. So what we’re building on the front end, Jack is the ability to pull in and we just launched our aggregation capabilities. In partnership with plaid, we need to pull in actual facts, right, in terms of the client’s balance sheet, you know, across inject, I know you’re passionate about that across the board, and not just assets and liabilities, but behaviors. So transactional information, spending information, saving information, we need to pull that together, and we’re doing that and then we need to combine that with that human perspective. Who am I not just a client profile, but what are my true preferences? What are the jobs I want to get done with my money? What are my goals and then how do I prioritize all that and what is accept To me in terms of, you know, just as implying is, you know, things like funding status and probability of success. If we’re Michael Liersch, I might be totally fine, that my quote unquote, gifts after my life to my family, so think of my daughter, Amelia. Alright, a 50% probability of success, but that might not be okay with Rachel, my wife. And so we need to talk about that we need to talk about, you know, whether, you know, her definition and my definition are okay is really okay, which probably should ultimately involve Amelia, my daughter. The idea here is that first part of that front end part where you’re capturing that information, and combining think of it that is that repository of information that people think of as qualitative, but it’s actually quantitative, which is the journey we’re on, right, you can actually codify that from a data standpoint. And then combine that with our more traditional asset liability, and transactional data, put that together. That’s where then it goes into E money to me, Jack, and then E money. And just I love that word that your pharmacy is this decision center concept, that it helps you make decisions. And really, the decisions are, you know, since everything isn’t the same for every human being, how do I navigate the connection between who I am what I want to accomplish, along with all the other people I’m navigating that with, and the reality of my financial situation now and in the future. And then what that will allow us to do jack and you know, we have talked about this before, is to then make actual suggestions that are bespoke, but like almost at scale, personalization, perspective, Jack, there to bespoke to that acumen. But they have common analytical frameworks to them. Right, so investing for my retirement, and that’s a priority for me. And I need a certain amount of money with a certain amount of confidence. You know, there are really clear Tex Mex actions for many human beings based on you know, contextual information, they provide security, you know, thinking of things like 401K’s matching, you know, then IRAs or, you know, Roth or traditional based on their fact pattern. And then you go into, you know, taxable accounts, I mean, there’s a real step by step process that we can help in that suggestion, you know, that proposal, think of it as experienced, as you would say, Jess, and then you can figure out what the client can actually do sustainably at this time versus what they need to actually defer. And I think that’s something we don’t talk a lot about to justice point in our industry is, it doesn’t have to be all done at once. It can be done, you know, moment by moment, step by step, penny by penny. And that’s what is extraordinary about our business now, especially with all the computing power and data power we have is we can capture all that information, what’s been done, and also what we want to do, and we can defer that and it’s okay. And that’s where Jess, I think that, you know, perspective on am I okay, you know, Am I still on track? I think that’s where that really comes in Jack, what we’re building as an entire ecosystem. Think of it as digitally? Your point yes, from an advisor connection standpoint, because all those things need to be congruent? How do I stay on track? What are my decisions that will keep me on a path that will get me to where I want to go? And how do I help the human being? Understand that right, the implications of the decisions they’re making, you know, whether they’re actually front of mind or not, and I’ll give you a really quick example, that another firm has done very well, where, you know, it’s even at the level of taking money out of an ATM, you know, you can think of asking certain, you know, client types, you know, this is great, you know, it’s your money, you know, did you know, or, you know, based on what we see, you know, is this really the right amount of money to remove from your bank account. And those types of things, I think are important highlights for human beings. Because sometimes, as behavioral finance suggests we’re not in those moments where contextualizing our entire financial lives. It says we have all these abilities, these decision frameworks, analytical frameworks, data frameworks, to provide that information to humans, we should, and yes, I don’t know if you agree with that, or Jackie, you agree with that. But that’s my point of view.

Jack Sharry: Given our time goes, now I’m gonna see if I can summarize Essentially, what this is where behavioral finance meets next best action to get there, right?

Michael Liersch: Yes, that is exactly. And I do want to check in with Jess, since we’re partnering with eMoney on some of these concepts. What are your thoughts there?

Jess Liberi: I very quickly will say, I think it’s oftentimes difficult for people to truly comprehend the small changes that they can make today, really adding up to something substantial with substantial impact to their financial future tomorrow. So to the extent that we can help bridge that gap, I think, Michael, you said it earlier, it’s oftentimes very hard for people to envision that future, that future state and to talk fluently about the future, to the extent that we can help them kind of draw that line and connect today and actions that they take today to the future and the possibilities of the future. I think, you know, we’ve got work to do there, but making headway.

Michael Liersch: So one of my friends websites, I’m not going to take credit for it. But one of my friends once said, we need to bring the future to the present for human beings to make better money decisions.

Jack Sharry: So our time is closing as our guests have other appointments to attend to. So there’s a couple of questions we didn’t get to. But we’ll just have to do this again, at some point down the road. But I’m really pleased to have both Jess and Michael on the podcast. Fascinating stuff. And if I may summarize, basically, what we’re talking about is having a deeper human connection has to understand what the client is trying to achieve all the challenges, issues, vagaries of life need to be considered. And then what’s the step by step, inch by inch, next best action to keep getting where you’re going. And along the way, things change, who knew we were to have a pandemic and just a couple of years ago, and who knew that we’d have the biggest set of people retiring early than has ever occurred in history, and so on and so forth. There’s all sorts of things that happened, who knew about supply chain issues, who knew about the real estate market going crazy, you knew about all sorts of things. So it all changes. So you got to kind of buckle up and stay in touch with your adviser use the kind of software and capabilities that places like the money and, and wells have available, and then work with an advisor to make good decisions. And those decisions will evolve and change over time. It’s all around listening to people, what really matters to them, as Martin Heidegger would say, people are always already committed to the question as to what and you understand what really matters to them. So I know it’s your daughter, your case, Michael. And I have a hunch, justice, your three kids. But as you understand what’s important to people, and you acknowledge that and you can work with someone. In this case, we’re just having a podcast. But if you’re talking about important matters, like people’s money and their financial security, it’s really important to really get them in what matters. And then and then you got to implement, then you got to adjust because things are going to change. So Michael Liersch, and Jess Liberi, this has been a lot of fun. We will do this again, we only covered about half of what we could have. But as the ecosystem evolves, as the money evolves, as well as continues to evolve, and I’d my view take a leadership position along these lines. We’ll have this conversation some more. So thanks so much for joining us today.

Michael Liersch: I would love that. That’s great.